Salt Lake City, UT Cap Rate: 1.90% — Rental Property Analysis
Salt Lake City is a premium-priced metro in the West with a mid-sized city of 204,657. At a 1.90% estimated cap rate, this is a appreciation-focused market where rents of $1,600/mo lag behind home prices. With a median home price of $560,000 and steady population growth supports long-term rental demand, Salt Lake City is primarily an appreciation play that requires creative strategies to generate positive cash flow.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
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Challenging for pure cash flow
Based on $560,000 median price and $1,600/mo median rent
Est. Cap Rate
1.90%
1% Rule
0.29%
Fails
GRM
29.2x
Price / Income
8.2x
Market Data
Median Home Price$560,000
Median Monthly Rent$1,600
Property Tax Rate0.58%
Population204,657
Population Growth1.4% / yr
Median Household Income$68,500
Vacancy Rate4.2%
Annual Appreciation2.6%
2026 Market Update: Salt Lake City
Salt Lake City's 0.3% rent-to-price ratio is well below the 1% rule. At median prices of $560,000, the $1,600/mo rent produces only $889/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
At current rates, a 20% down conventional loan ($112K at 7%) would result in approximately $-2,090/mo cash flow — negative at median prices. Larger down payments, seller financing, or buying 15–25% below median are strategies to turn the numbers positive.
The 29.2x gross rent multiplier and 4.2% vacancy rate position Salt Lake City as a growth-dependent market. With annual appreciation at 2.6%, total returns (cash flow + equity growth) run approximately 4.5% before financing leverage.
Cap Rate Calculator — Salt Lake City
Pre-filled with Salt Lake City medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.58% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
1.69%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$9,442
net operating income
Gross Rent Multiplier
29.2x
High (>15)
1% Rule
0.29%
✗ Fails
Monthly Cash Flow
$787
before debt service
Annual Breakdown
Gross Rental Income$19,200
Less Vacancy−$806
Effective Income$18,394
Less Operating Expenses−$8,952
Net Operating Income$9,442
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Factor in financing to see your actual return on invested capital in Salt Lake City.
$
$140,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-13.85%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$156,800
$140,000 down + $16,800 closing
Monthly Mortgage
$2,738
on $420K loan
Monthly Cash Flow
$-1,810
after all expenses
Annual Cash Flow
$-21,721
before taxes
Cash Flow Breakdown
Monthly Rent$1,600
Less Expenses−$672
Less Mortgage−$2,738
Monthly Cash Flow$-1,810
Is Salt Lake City a Good Place to Invest in Rental Property?
Salt Lake City, UT has a population of 204,657 and has been growing at 1.4% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $560,000 paired with median rents of $1,600/mo produces an estimated cap rate of 1.90%.
Property taxes at 0.58% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 4.2% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.
At a price-to-income ratio of 8.2x, homes cost about 8.2 times the local median income of $68,500. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 2.6% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: At current median prices, Salt Lake City is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.
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